Banking on a better deal for consumers

You could make the most of your money by switching your bank account
You could make the most of your money by switching your bank account
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Bank bashing has become a national sport, but it seems few of us are willing to vote with our feet when it comes to hidden charges, poor service, or a bad banking experience.

Bank bashing has become a national sport, but it seems few of us are willing to vote with our feet when it comes to hidden charges, poor service, or a bad banking experience.

Consumer Champion Co-operatives UK reckons that fed-up consumers are missing out to the tune of £30m a day for remaining loyal to their bank.

The lack of competition and diversity in retail banking has undoubtedly led to low interest on savings accounts, exorbitant mortgage rates and excessive fees and penalties costing bank customers more than £11.2bn a year.

If more disgruntled customers were prepared to move their accounts, overcharging and poor service would be consigned to history.

So how easy is it to switch bank accounts and get a better deal? According to popular mythology it’s a risky business, but it’s a piece of cake provided you take a few simple steps.

· What do you want from your bank?

Think about how you use banking services. Do you visit your local branch regularly, or do you want a combination of fixed branch and internet banking?

You first need to check that the bank offers the services you need and use most. Ask friends and colleagues about services and service standards.

· Undecided?

Before you make a move, or you can’t quite sum up the courage to throw caution to the winds, talk to your bank about getting a better deal from them.

Most banks have a bewildering array of current accounts to chose from, and they may be able to provide a banking product more suited to your needs.

· Check your bank statements

According to recent research, 49 per cent of bank customers believe current accounts are pretty similar, but this is far from being the case. Your choice of account should depend on your needs.

If you regularly drift into the red every month you should look for a bank that offers a good rate on overdrafts. If you nearly always remain in the black you should search out accounts that pay the best rates of interest. Frequent travellers may be interested in an account with a credit card that doesn’t make charges for foreign withdrawals.

· Make the most of special offers

Personal banking is a very competitive business. The banks can’t wait to get their hands on your money. If you’re on the ball you have a choice of a £100 ‘golden hello’, five per cent credit interest and zero per cent overdraft, or £5 cash per month for switching.

· Read the small print

All the best buy accounts come with small print conditions. Currently tops for a £100 sign up bonus, and five per cent credit interest for the first year, plus the zero per cent one year overdraft facility is the Santander preferred current account.

But you won’t get the full perks unless you can keep the account topped up by at least £1,000 per month.

First Direct is currently offering new account holders the £100 perk, and Natwest will give you two per cent cashback up to £125 on qualifying debt card purchases for the first six months. Both offers come with conditions so it’s essential to check before you switch.

For help choosing your new account and doing most of the legwork for you go to moneyfacts.co.uk or moneysupermarket.com

n Beware premium account offers

Watch out for ‘free’ accounts that come with benefits like free travel insurance, or car breakdown cover. Shopping around for these services can work out far cheaper than paying the typical £12 a month fee.

n Help with switching

For a hand-holding guide on how easy it is to switch bank accounts go to thesmartwaytopay.co.uk and click on the account switching button.